02 October 2017, Sweetcrude, Lagos — The Auditor-General of the Federation (AuGF) has accused the Petroleum Products Pricing and Regulatory Agency (PPPRA) of failing to collect and transfer to the Federation Account, N3.194 billion being ‘over recovery’ due and received from oil marketers since 2015.
The AuGF, in the Audit Report for 2015 released a couple of days ago, also questioned PPPRA’s remittances to the Federation Account over the last couple of years, therefore, it ordered the agency to provide evidence of the remittance to the Federation Account of all ‘over recoveries’ collected in the last five years.
Specifically, in its report on the over recoveries yet to be collected, the AuGF said, “It was observed that a total sum of N1.597 billion being the ‘over recovery’ due from the oil marketers in 2015 were yet to be collected by the Agency over a year after it was due, contrary to usual practice in the industry.
“The practice had been that oil marketers will pay for the product and later recover their money from Federal Government (through PPPRA). In the case under review, the oil marketers over recovered what was due to them by N1.597 billion. In other words, the oil marketers were overpaid.”
The Auditor-General lamented that the non-collection of the ‘over recovery’ had denied the Federation needed funds for sharing to the three tiers of government, as well as the running and maintenance of the subsidy regime, as at the period under review.
AS a result, the AuGF directed the management of the PPPRA to provide, “Explanation for the non-collection of the ‘over recovered’ amount by the oil marketers for over two years since this occurred; and to also take immediate and concrete action to recover the above outstanding amount from the oil marketers and forward to the Auditor General for appropriate verification.”
On the non-transfer of over-recovery collected from the marketers, the AuGF said it observed from the records presented to the audit team that a total of N1.597 billion being the over-recovery collected from the marketers as extracted from the Audited Financial Statements of the Agency, was not remitted back to the Federation Account since subsidy was initially paid from the account.
Giving a breakdown of the figures, the AuGF said in 2014, N231.132 billion was collected from the marketers, but was not remitted to the Federation Account, while in 2015, N1.366 billion was collected but not remitted.
To this end, the AuGF said, “The Management of PPPRA is required to provide: an explanation for the non-collection of the ‘over recovered’ amount by the oil marketers for over two years since this occurred.
“Take immediate and concrete action to recover the above outstanding amount from the Oil Marketers and forward to the Auditor General for appropriate verification.”